Singapore’s Temasek Holding has agreed to acquire a Rs 1,000-crore stake in Manipal Hospitals in a deal that possibly turns the Bengaluru-based private healthcare network into an industry consolidator. Temasek’s investment committee last week approved a transaction to buy existing private equity investor True North’s 16% stake in Manipal Health Systems, which runs a hospital chain of around 5,000 beds. The move values Manipal at $1 billion, or Rs 6,500 crore.
True North, a leading Indian private equity firm managing assets worth over $2 billion, is exiting Manipal with a threefold gain on its five-year-old investment. Temasek joins another global investor TPG Capital, which owns 22%, as a significant minority shareholder in the Ranjan Pai-controlled Manipal Hospitals.
Last year, True North acquired controlling interest in KIMS Hospitals with a network in southern India and the Arabian Gulf. True North — a buyer of high-growth, mid-market Indian companies in financial services, consumer and healthcare sectors — also has minority shares in Aster DM Healthcare, which it plans to exit through an IPO later this fiscal.
In February this year, TOI reported that True North was seeking an exit from Manipal by either selling shares to Temasek or TPG. When contacted, Manipal and True North declined to comment, while Temasek could not be reached for comments immediately.
With TPG and Temasek jointly owning about 40%, Manipal could become an engine for consolidation in the hospitals business. TPG has been chasing acquisitions, notably that of Fortis Healthcare, though the deal-making has run into court rulings and diligence concerns. Temasek owns shares in other healthcare networks, including Naresh Trehan’s Medanta.
India’s healthcare industry is projected to grow at a compounded annual growth rate of 13%, hitting Rs 6.85 lakh crore by 2020, on the back of improving healthcare affordability, changing disease patterns, greater health awareness and rising insurance coverage.
